Kodak's Chapter 11 Status - Business As Usual

As financial pundits and industry analysts wave their fingers, shouting "I told you so!" at the news of Kodak filing for Chapter 11 bankruptcy protection, a conversation with the people this announcement affects the most reveals that it is not all doom and gloom. In a recent conversation with Sue Cardot, Kodak's worldwide director for BSSG Outbound Marketing and Communications, and Jackie Horn, Kodak's worldwide marketing manager for Document Imaging, they seemed confident that their day-to-day operations wouldn't be significantly impacted, and that the BLI award-winning Kodak-branded line of scanners, software and services would live on and continue to expand.

According to Kodak, its Document Imaging business, now part of the "Enterprise Services and Solutions" portion of the company's newly formed commercial division, is one of the strongest areas for the company in terms of continued product growth, with a 15- to 20% increase in 2011 (compared to 2010). "Digital and Functional Printing" (its commercial printing operations) and "Graphics and Entertainment and Commercial Film" (commercial consumables), which also fall under the commercial division, remain a significant part of Kodak's strategy.

Cardot also stated that Kodak's partner and customer relationships are still quite strong, albeit after some "turbulent" conversations. In fact, when browsing Web sites of various Kodak resellers, one even went a step further and re-posted Kodak's Chapter 11 FAQ page on their Web site, with a statement saying, "Kodak scanners are among the most popular document scanners sold on the market today. If you have any concerns that it's not "business as usual" after the Chapter 11 filing, please select the FAQ button on the left hand button bar."

Going forward, the company plans to focus on its on most valuable business lines. However, to continue that growth, Kodak realizes some assets may need to be sold and liabilities managed. As a part of that push, Kodak has recently consolidated its business operations into two divisions: consumer and commercial. And since 2003, Kodak has closed 13 manufacturing plants and 130 processing labs and reduced its workforce by 47,000 employees. Cardot mentioned that acquisitions and mergers are a part of the normal course of doing business and could be evaluated.

In an effort to boost revenue, Kodak also plans to fully enforce Kodak intellectual property rights against industry players that have infringed upon digital imaging patents, or sell its patents. Over the past few weeks, the company has announced lawsuits against Fujifilm Corporation, Samsung Electronics Co. Ltd., Apple Inc. and HTC Corporation for infringement of certain Kodak patents.

Kodak announced its filing for bankruptcy protection on January 19th. According to the company, Kodak received a $950 million credit from Citigroup to maintain operations during the bankruptcy process, which is slated to end in 2013. The Kodak representatives BLI spoke with said they are confident Kodak will come out of this process a leaner, more sustainable company.